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Tax Returns vs. Tax Refunds: How They Differ, What’s Changed This Year



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A tax refund and tax return are not the same.

Angela Lang / CNET

A tax return and a tax refund. They sound the same and sometimes go together, but they are not the same. And this year there are more nuances than ever, due to the Covid-19 pandemic and stimulus controls. So what’s the difference between the two, and what are the biggest changes you should know about?

Tax season is only weeks away, but it is not too early prepare your tax information to send to the IRS next month – the agency doesn’t start accepting returns until Feb. 12. If you are one of many people file their taxes as soon as possible to get their refunds faster (and for millions of Americans this year, their missing stimulus controls and a possible third check), we applaud you.

We explain the details of each term below and everything you need to know about how tax refunds differ this year and how to find out if you’re getting one. Once you’ve filed your tax return, here’s how you can do it track the status of your refund.

What is a tax return?

A tax return is a form that you file with the IRS each year and submit your adjusted gross income (AGI), expenses and other financial information. Most of these details come from your W-2 statement that your workplace provides you with weeks in advance to file your taxes, but you can also have a 1099 or other form to record your income.

Your tax return includes your gross income (which is different from your AGI), how much you have already paid in taxes (through your business withholding or estimated taxes paid in advance if you are self-employed), and other important information you need to know about your taxes Submit.

However, the tax return will also balance the deductions for your kids as well as how much you paid student loan interest, health insurance, Roth IRA contributions, home office expenses, business expenses, charitable donations, and more.

You must file a tax return to get a refund. However, just because you are filing a tax return doesn’t mean you will get a tax refund.

What is a tax refund?

A tax refund is what will be granted to you by the United States Treasury if you paid more in state or federal taxes in the previous year than was necessary. For example, your workplace may have withheld more money than it actually needed from your salary, or you may be self-employed and have had to pay estimated taxes in excess each quarter.

The government will reimburse you, or “return”, the difference between what you paid and what you owed as a one-time payment; in other words, your tax return. Any deductions from your taxes (see above) can also add to the amount you can expect.

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You can get your money back if you paid too much tax last year.

Sarah Tew / CNET

What’s different about tax refunds this year?

For your taxes for 2020 (the one you file in 2021), any lack of incentive money you claim from the first or second stimulus controls can also be included in your tax refund. To get that money, you have to submit a restoration loan on your tax return. And if you received a stimulus check last year, you are not taxed on it or less because the IRS doesn’t consider it income.

Tax credits for children can also help you get more money on your tax refund this year or next year – especially if President Joe Biden’s proposal for the extension of the child discount becomes law. The plan would allow families to claim up to $ 4,000 for a single child and $ 8,000 for two or more children under the age of 13. At this point, families can currently claim a $ 2,000 credit for children under the age of 17.

Others changes for taxes 2020 Include the standard deductions for single filers ($ 12,400) and married joint filers ($ 24,800) and deductions of up to $ 300 for eligible charities.

How do I know if I get a tax refund?

If you use tax filing software or service, you’ll see a final estimate of how much you should receive after you file your tax return (even if you’re preparing yourself). Once the IRS receives your return, they’ll send you an email or text message to let you know your final refund amount.

After they accept your refund, it means your money is on its way to your bank account or mailbox. You can track your refund from the time you file your tax return until you receive your payment. Note that it can take anywhere one to three weeks to get your money back, assuming no errors were found in your tax return.

For more tax information on your taxes for 2020, here it is deadline for filing your taxes for 2020, why you may need to file taxes this yeareven if you usually don’t and three reasons to sign up for direct deposit when you file your taxes for 2020.


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